Netflix asks U.S. FCC to reject AT&T-DirecTV merger unless changes made

May 5, 2015, 5:37 PM UTC
Netflix headquarters in Los Gatos, California, Tuesday, July 8, 2014.  (Paul Sakuma Photography)
Netflix headquarters in Los Gatos, California, Tuesday, July 8, 2014.
Photograph by Paul Sakuma

(REUTERS) — Netflix Inc has urged the U.S. Federal Communications Commission to reject the pending $48 billion merger of AT&T Inc (T) and DirecTV (DTV) unless its concerns about the deal are addressed.

A Netflix (NFLX) spokeswoman said on Tuesday that the video streaming company does not oppose the merger in principle but is rather seeking remedies that would help resolve its competitive concerns.

“While we are participating in the government’s review, we are not opposing the merger,” the spokeswoman, Anne Marie Squeo, said in a statement. “We’ve been highlighting concerns about AT&T’s broadband practices and the need for appropriate remedies since last September.”

According to regulatory disclosures posted on Tuesday, Netflix representatives met recently with more than 20 FCC officials and raised concerns about the combined company’s gatekeeping power as it would become the country’s largest pay-TV provider with potentially expansive broadband reach.

Though the filing does not amount to a formal “petition to deny” the merger, it marks the strongest language yet from Netflix on the proposed merger of the No. 2 wireless carrier and the largest U.S. satellite-TV company. Previous FCC filings from Netflix on the deal called for approval with conditions.

“The combination of these companies would increase the incentive and ability to limit competition and innovation in the online video space,” Squeo said.

Netflix’s April 30 meeting with the FCC’s merger reviewers came just days after the agency’s strong opposition helped thwart another mega-deal between the two largest U.S. cable providers, Comcast Corp (CMCSA) and Time Warner Cable Inc.(TWC).

The growing online video and over-the-top video markets became a critical issue in the review of that merger, fueled by heated opposition from Netflix, Dish Network Corp (DISH), some media companies and public interest groups.

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